Alabama legislation received final approval from lawmakers to update the state’s captive insurance law, which could potentially improve the state’s competitiveness in creating captive insurance companies.
Gov. Robert Bentley is expected to sign the bill, which levies a $100,000 annual cap on captive premium tax.
House Bill 270, once approved, also exempts newly-formed captives from premium taxes for a year, and allows risk retention groups to be formed in the state. Other changes proposed by the bill include modernizing the language and capital requirements for protected cell captives, allowing captives to establish series limited liability companies and mutuals, and the introduction of a 60-day provisional license.
On Tuesday, the bill was approved by the Alabama Senate on a 29-0 vote. The bill previously passed the House favorably.
A spokesman with the Alabama Department of Insurance said that the legislation offers “a much-needed update to our state’s captive law.”
Alabama had 42 captives by the end of 2015.
